For many Canadians, owning a home is one of their biggest financial assets and one of the biggest factors shaping their retirement plans.
But being mortgage-free doesn’t necessarily mean you’re ready to retire. Property taxes, home insurance, maintenance and everyday living expenses can still add up, while retirees need enough savings and income to support their lifestyle.
So, how much do Canadian homeowners actually need to retire comfortably? The answer depends on where you live, how much you spend, your retirement income and how much equity you have in your home. It also depends on how long your retirement may last. Someone retiring at 65 could need to fund 20, 25 or even 30 years of living expenses, making longevity and inflation important parts of the calculation.
How Much Do You Need to Retire?
There isn’t one number that works for every Canadian. The Financial Consumer Agency of Canada recommends starting with your expected retirement expenses and comparing them with your anticipated sources of income, including CPP, OAS, workplace pensions and personal savings.
For example, someone planning to spend $50,000 a year in retirement will need a different savings strategy from someone expecting to spend $80,000.
Your retirement budget should account for:
- Housing and property taxes
- Utilities and insurance
- Home repairs and maintenance
- Food and transportation
- Healthcare and dental costs
- Travel and entertainment
- Emergency expenses
It’s also important to account for expenses that may change over time. Transportation and commuting costs may fall after retirement, for example, while healthcare, home modifications or support services could become more significant later in life.
Your retirement budget should be based on the amount you will actually have available to spend, not simply your gross retirement income. CPP, OAS, workplace pensions and withdrawals from registered investment accounts can have tax implications. Building some tax planning into your retirement strategy can help avoid overestimating how much income you will have available.
Does Owning a Home Make Retirement Easier?
It can. A homeowner who has paid off their mortgage eliminates one of the largest monthly household expenses. But owning a home doesn’t eliminate housing costs entirely.
Property taxes, insurance, utilities and maintenance continue throughout retirement. Homeowners should also prepare for major expenses such as a new roof, furnace or other unexpected repairs. Home equity can also provide a financial cushion. Statistics Canada found that real estate accounted for 42% of Canadian household wealth in 2023, highlighting how significant housing is to Canadians’ overall finances. However, home equity isn’t the same as retirement income.
A $700,000 home doesn’t automatically provide $700,000 to spend in retirement. To access that money, homeowners would generally need to sell, downsize, borrow against the property or otherwise convert some of that equity into cash.
Homeowners should also consider whether they will still have other debts when they retire. A paid-off mortgage can significantly reduce monthly expenses, but car loans, lines of credit, credit card balances or other debt can continue to put pressure on a fixed retirement income.
CPP and OAS Can Help Fill the Gap
Government benefits can provide an important source of retirement income.
As of 2026, the maximum CPP retirement pension at age 65 is $1,507.65 per month. However, the average monthly CPP retirement pension for new beneficiaries was $858.34 in July 2026. The amount you receive depends on several factors, including your contributions and when you begin collecting CPP.
OAS provides another source of income. From October to December 2026, the maximum monthly OAS payment is $762.50 for Canadians aged 65 to 74 and $838.75 for those 75 and older. For many homeowners, these benefits won’t cover their entire retirement budget, meaning personal savings and investments still matter.
When planning for retirement, it’s important to use your expected CPP and OAS amounts rather than assuming you will receive the maximum. CPP payments depend on your contribution history and the age at which you begin receiving the benefit, while OAS can also be affected by income.
Higher-income retirees should also be aware of the OAS recovery tax, commonly known as the OAS clawback. If your income exceeds the applicable threshold, you may have to repay some or all of your OAS, reducing the amount of government income available to you.
Where You Live Matters
Your retirement budget can look very different depending on where you live. A homeowner in a smaller community with a paid-off property may have lower housing and living costs than someone living in one of Canada’s most expensive real estate markets.
Statistics Canada reported that median family net worth in 2023 ranged from $286,200 in New Brunswick to $773,500 in British Columbia, while Ontario’s median was $665,600. That doesn’t mean retirees in one province automatically need more savings than those in another. Instead, it shows why retirement planning needs to consider both income and cost of living.
Property taxes and home maintenance can also vary significantly between communities. For homeowners considering a move in retirement, the price of the new home is only one factor. Utilities, insurance, property taxes, transportation and access to healthcare should also be included.
Should You Count Your Home as Retirement Savings?
This depends on your plans. Some homeowners may eventually downsize, moving from a larger family home into a smaller property and using the difference to supplement their retirement savings. Others may choose to stay in their home and leave their equity untouched.
CMHC recommends that older homeowners consider factors such as accessibility, healthcare, transportation and proximity to family when thinking about their long-term housing needs. If you plan to stay put, don’t count your home’s full market value as money available for retirement. Instead, focus on the income and savings you can actually access.
This is particularly important when estimating how much retirement savings you need. A homeowner may have hundreds of thousands of dollars in home equity but relatively little cash or investment income. Unless they plan to sell, downsize or borrow against the property, that equity may not help pay the monthly bills.
How Much Should You Have Saved Outside Your Home?
There is no universal savings target, but homeowners can estimate their retirement savings gap by comparing annual expenses with reliable retirement income.
For example, imagine a homeowner expects to spend $60,000 per year in retirement and receives $35,000 annually from CPP, OAS and a workplace pension. They would need to find another $25,000 each year from savings, investments or other sources of income.
This doesn’t mean they simply need $25,000 multiplied by the number of years they expect to be retired. Investment returns, inflation, taxes and changing expenses all affect how long their savings may last. Calculating this annual gap can give homeowners a much clearer starting point than relying on a single retirement-savings number.
Don’t Overlook Inflation and Long-Term Costs
A retirement plan that works today may not provide the same purchasing power 20 years from now. Inflation can gradually increase the cost of food, utilities, insurance, home repairs and other necessities.
Homeowners should also think about how their housing needs could change with age. A home that works well at 65 may require modifications later, or a homeowner may eventually need to move closer to healthcare, family or public transportation. Building some flexibility into a retirement budget can help account for these changes.
What This Means For Homeowners
For Canadian homeowners, retirement readiness isn’t just about hitting a specific savings target. A mortgage-free home can reduce monthly expenses and provide substantial wealth, but homeowners still need enough liquid savings and income to cover their lifestyle and unexpected costs.
Before retiring, consider three numbers:
- How much will I spend?
- How much reliable income will I receive?
- How much savings will I have to cover the difference?
Your home can be an important part of that equation, but it shouldn’t be the entire plan. Ultimately, the goal isn’t simply to own a home when you retire. It’s to make sure your home, savings and income work together to support the retirement you want.
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